May 12, 2023
All across the country, labor groups have been protesting the new minimum wage, which was set at only about half of last year’s inflation rate.
In the most dramatic protest, almost 20,000 workers signed a letter calling on the government to cancel the 27 percent hike in the minimum wage when the last inflation report from the Statistical Center of Iran showed inflation as of February 21 stood at 53.4 percent for the preceding 12 months.
The letter did not propose a percentage for the increase workers wanted but asked that it be set in line with prevailing inflation.
The minimum wage is set annually by the Supreme Labor Council, a panel composed of government officials, employer representatives and workers.
The new monthly minimum wage was set at 53,073,300 rials or $106 at the exchange rate of 500,000 rials per US dollar. Last year’s minimum wage was set at 41,790,000, which was then worth about $160, given the exchange rate at that time of about 260,000 rials to the dollar.
As the accompanying table shows, the minimum wage rarely shows any relationship to the inflation rate, though in some years it has been much higher than the inflation rate. In 2007, 2018 and 2022, the minimum wage was hiked by almost twice the inflation rate.
For the entire 19-year period shown on the accompanying table, the minimum wage has been raised only enough to cover about 30 percent of inflation. In other words, labor is doing much worse wage-wise than it was two decades ago.